GSEB Class 10 Social Science Solutions Chapter 15 આર્થિક વિકાસ

Question 1. Discuss any five characteristics of a developing economy. OR State the characteristics of a developing economy.
Answer: The main characteristics of a developing economy are as follows:
1. **Low Per Capita Income:** In developing countries, due to a high rate of population growth, the per capita income remains low. This causes a low standard of living for people.
2. **Population Growth:** The annual population growth rate in these countries is 2% or more.
3. **Dependence on Agricultural Sector:** The primary economic activity in these countries is farming. More than 60% of the country's population relies on agriculture for employment. Agriculture's contribution to the national income is around 25%.
4. **Unequal Distribution of Income:** In these countries, there is significant inequality in the ownership and distribution of national income and productive resources. This inequality exists in both rural and urban areas.
• In these countries, income and wealth are concentrated among a very small number of people.
• The top 20% wealthiest people in these countries own 40% of the national income, while the bottom 20% poorest people only hold 10% of the national income.
5. **Unemployment:** The total unemployment rate in these countries is more than 3% of the workforce. Seasonal, disguised, industrial, and other types of unemployment are more common in these countries. Additionally, the period of unemployment is often quite long.
6. **Poverty:** The proportion of poor people in these countries is about one-third of the total population. Severe unemployment and unequal income distribution are responsible for widespread poverty in these countries.
7. **Dual Economy:** The nature of the economy in these countries is dual. In the rural areas of these countries, backward farming, old machinery, a traditional social structure, low production, severe poverty, and widespread unemployment prevail. In contrast, urban areas see modern industries, capital-intensive production methods, extensive use of new machinery, and a modern, luxurious lifestyle.
8. **Inadequate Basic Services:** Essential infrastructure and services required for development in these countries, such as communication, transportation, shipping and ports, electricity, banking, education, and healthcare, are not available in sufficient quantity and with high quality. As a result, the development of these countries is hindered.
9. **Nature of International Trade:** These countries primarily export agricultural products, garden products, and raw materials. The demand for these goods is low, and prices are often reduced. Consequently, their export earnings are lower.
• These countries import industrial products and machinery, whose high prices lead to higher import expenses.
• Thus, due to an unfavorable foreign trade structure, the country's foreign debt continues to rise.
In simple words: Developing countries have low per capita income due to fast population growth, high unemployment, and significant poverty. Their economies are often dual, with both modern urban sectors and traditional rural sectors. They also face unequal income distribution, limited basic services, and an unfavorable balance of international trade.

Exam Tip: When discussing characteristics, always provide clear, concise points with a brief explanation for each. Using examples can strengthen your answer.

Question 2. Explain why needs are unlimited.
Answer: Human needs are countless and unlimited. They never end and keep growing continuously.
• When one need is satisfied, another immediately emerges.
• Often, needs have to be satisfied repeatedly.
• Some needs arise due to advances in science and technology.
• For instance, someone who walks to work feels the need for a bicycle; but after getting a bicycle, they desire a scooter.
• This characteristic of human nature, being dissatisfied with what they have, means that human needs never end until the very end of life.
• Human needs do not add, subtract, or divide; they multiply.
• As human life evolves, the ways of satisfying needs also change. As a result, human needs continue to expand. Thus, needs become unlimited for many reasons.
In simple words: Human needs are endless and keep increasing. As one need is met, another arises, and new technologies also create more desires. This constant growth means needs multiply rather than diminish, lasting throughout life.

Exam Tip: Illustrate with personal examples to show how human desires evolve and never fully cease, making them unlimited.

Question 3. Discuss the limitations of the market system. OR State the disadvantages of the market system. OR State the shortcomings (limitations) of the capitalist system.
Answer: The disadvantages of the market system are as follows:
• In this system, production is centered around profit, so there is more production of luxury goods in the country, while the production of essential needs is less.
• There is no role for the state in the market system, which leads to the misuse of natural resources.
• Consumers are exploited due to their lack of knowledge about the market.
• In the market system, due to private ownership of productive resources, wealth and income are concentrated, which increases income inequality. This creates economic instability.
• Monopoly develops in this system. It exploits consumers and laborers.
In simple words: The market system focuses on profit, leading to more luxury goods and fewer necessities. Lack of state control can cause natural resource waste and consumer exploitation. Private ownership centralizes wealth, increasing inequality and economic instability, and often fosters monopolies that exploit workers and customers.

Exam Tip: When discussing economic system flaws, always link the characteristic (e.g., profit motive) to its negative consequence (e.g., unequal distribution) for a comprehensive answer.

Question 4. Discuss the allocation of resources in a mixed economy.
Answer: The allocation of resources in a mixed economy is as follows:
A mixed economy features the coexistence of both public and private sectors. Therefore, the responsibility for basic amenities, infrastructure development, and industrial growth is assigned to the public sector. The public sector typically develops key capital-intensive large industries that require substantial investment; transportation services like railways and air travel; communication services such as telegraph, postal, and telephone; radio and television broadcasting; and services like life insurance, banking, electricity, and large irrigation projects.
• Besides these, industries with lower risk and less capital investment, small units producing consumer goods, agricultural-commercial units, etc., remain in the private or individual sector.
• There is also a joint sector, where both public and private sector units operate. For example, sectors for services like road transport, education, and healthcare.
In simple words: In a mixed economy, both government and private businesses exist. The government handles big projects like infrastructure, heavy industries, and essential services that need large investments. Private businesses manage smaller, less risky ventures and consumer goods. Some areas also involve both sectors working together, like in transport or education.

Exam Tip: For mixed economies, highlight the division of responsibilities between public and private sectors and mention the areas where they often collaborate.

3. Write the Answers to the Following Questions Briefly:

Question 1. What is economic development?
Answer: Economic development is a process in which there is an increase in the national income and per capita income of a country, resulting in an improvement in people's living standards.
In simple words: Economic development is when a country's total income and individual income grow, making people's lives better.

Exam Tip: Define economic development by mentioning both quantitative (income increase) and qualitative (living standard improvement) aspects.

Question 2. What are the main factors of production? State them.
Answer: The main factors of production are:
• Land,
• Labor,
• Capital, and
• Entrepreneurship.
In simple words: The main things needed to produce goods and services are land, human effort (labor), money or assets (capital), and the skill to organize them (entrepreneurship).

Exam Tip: Remember the four traditional factors of production: Land, Labor, Capital, and Entrepreneurship. Each plays a critical role.

Question 3. Explain the meaning of economic activity. OR What is economic activity called? Give an example.
Answer: The activity of earning income or spending money through the exchange of goods or services is called economic activity. For example, the activities of a farmer, artisan, trader, teacher, lawyer, doctor, engineer, etc., are considered economic activities.
In simple words: Economic activity involves making or spending money by trading goods or services. For example, a farmer working or a doctor providing services for a fee are economic activities.

Exam Tip: When defining economic activity, clearly state that it involves monetary transactions and provide diverse examples to illustrate.

Question 4. Which economic system has India adopted?
Answer: India has adopted the economic system of a mixed economy.
In simple words: India uses a mixed economic system.

Exam Tip: Remember that a mixed economy combines elements of both market and command economic systems.

Question 5. What is the alternative use of resources?
Answer: If a factor of production can be used for more than one purpose, then that resource has multiple uses. This resource can only be used for one purpose at a time. Therefore, this use is called alternative use. For example, if we grow wheat in a field, we cannot grow millet, groundnuts, corn, or other crops. The other uses of the land have to be forgone.
In simple words: When a resource can be used for several different things but only one at a time, its use is considered alternative. For example, a piece of land can grow wheat or corn, but not both at once; choosing one means giving up the other.

Exam Tip: The concept of alternative use highlights scarcity and the need for choice in economics. Always provide a clear example like land to illustrate this principle.

4. Choose the Correct Option from the Alternatives Given Below Each of the Following Questions and Answer:

Question 1. Which type of country is economically developing?
(a) Developing
(b) Backward
(c) Developing
(d) Poor
Answer: (c) Developing
In simple words: A country that is experiencing economic growth and structural changes is classified as a developing country.

Exam Tip: Understand the basic definitions of economic classifications like 'developing' to answer such direct questions accurately.

Question 2. According to the World Bank's 2004 report, if per capita income is less than how many dollars, is it called a developing country?
(a) 480 $
(b) 520 $
(c) 735 $
(d) 250 $
Answer: (c) 735 $
In simple words: The World Bank in 2004 defined a developing country as one with a per capita income below $735.

Exam Tip: Remember specific statistical criteria or thresholds, like the World Bank's per capita income benchmarks, to define economic classifications.

Question 3. Which system is called a free economy?
(a) Socialist system
(b) Mixed economy
(c) Market system
(d) None of the options
Answer: (c) Market system
In simple words: A market system is often called a free economy because economic decisions are mostly made by individuals and businesses, with minimal government involvement.

Exam Tip: Understand the core principles of different economic systems, such as the market system's emphasis on freedom and minimal government intervention.

Question 4. In which sector of the economy is the animal husbandry profession included?
(a) Secondary
(b) Primary
(c) Service sector
(d) Given
Answer: (b) Primary
In simple words: Animal husbandry, which involves raising animals for products, belongs to the primary sector of the economy, along with agriculture and mining.

Exam Tip: Classify economic activities correctly into primary (raw materials), secondary (manufacturing), and tertiary (services) sectors.